Mallek v Central Loan Admin. & Reporting (CENLAR)

Holding The court reversed the lower court’s grant of summary judgment because the mortgage servicer failed to establish a prima facie case that its actions were justified under the contract or RPAPL 1308. Specifically, the servicer did not explain why it reimposed a previously waived hazard insurance requirement or why it could treat the property as abandoned while the plaintiff was actively litigating and paying taxes.

The court’s words

a mortgage loan servicer such as defendant has an implied duty of good faith and fair dealing in performing mortgage contract services on behalf of the mortgagee

2026 NY Slip Op 51303[U], at the official text

defendant failed to explain why it was appropriate to reimpose a hazard insurance requirement that it had previously waived when it had not shown that the condition of the property had changed in the intervening time

2026 NY Slip Op 51303[U], at the official text

RPAPL 1308 only applies to vacant and abandoned properties as defined under RPAPL 1309. It was uncontested that, during the time when defendant took the actions and incurred the charges in issue, plaintiff was actively engaged in litigation seeking to procure insurance proceeds on the property

2026 NY Slip Op 51303[U], at the official text